Technology

So, What the Heck Are Web Services?

February 07, 2005

Lots of people would say a new software technology called Web services really caught techdom's attention with a 1999 press conference held in downtown San Francisco by software giant Microsoft. Chairman Bill Gates introduced to the world a concept he called BizTalk, which was formalized five years ago under the name .Net. The new technology, which would eventually be followed by a suite of server software for businesses, was Microsoft's (MSFT) entr?e into the growing business of using the Internet to connect different types of software together, regardless of who wrote the programs.

Although it didn't seem like much at the time, Microsoft was on the edge of a huge shift. With every big tech company from it and Sun Microsystems (SUNW) to IBM (IBM) and Oracle (ORCL) and a whole bunch of smaller companies pushing Web services, there's no question that they -- or it, as the case may be -- represent the next big technology change in computing.

But there's one problem: Few people seem to actually agree on what a Web service is. So to help demystify this huge but nebulous new movement here are some common questions and answers about Web services.

Q: Why the confusion?

A: The term "Web service" is a lot like one of those words in the dictionary with two very distinct definitions. Web services means one thing to the hard-core software programming crowd and something else to businesspeople.

Q: Fair enough. So what's a Web service in the eyes of a programmer?

A: To computer programmers and other techies, Web services refer to a set of programming standards used to make different types of software talk to each other over the Internet, without human intervention.

Web services share three types of computer programming: Extensible Markup Language (XML), Standard Object Access Protocol (SOAP), and Web Services Definition Language (WSDL). XML is sort of the Esperanto of Web services. Pioneered in the mid-1990s by Tim Bray, who's now a researcher at Sun Microsystems' Sun Labs, it was the first step to giving programmers accustomed to, say, using Microsoft's software development tools an easier way to work with programmers working with development tools sold by Sun.

SOAP is sort of a virtual envelope for computer code that acts like an introductory letter, saying what's inside and where it should go. And WSDL is the nifty little code that allows different types of software talk to directly each other. That's the real promised land for Web services -- software interacting without humans getting in the way.

XML also has dozens of subsets that address issues specific to different industries such as banking, retailing, and even the computer industry itself.

Q: Does anyone own those core Web-service technologies?

A: Thankfully, no. The tech industry has so far shown an ability to play nice when it comes to this technology. Like Hypertext Markup Language (HTML) that's the face of all Web programming, no one owns these technologies. Sure, plenty of bickering has occurred, and fears are never far away that that one company or another is trying to warp Web-service standards to its benefit, but that hasn't really happened. The standards are managed by the World Wide Web Consortium, and the W3C's technocrats have managed to keep the peace -- at least for now.

Q: So what's the other definition of Web services?

A: Web services can also refer to technology that's delivered to a consumer or business over the Internet. Typically, that's done by a software company that sells software to its customers as a monthly, pay-as-you-go service, rather than sending them disks and letting them install it themselves.

This new model has lots of advantages. It means less up-front costs for the customer. It means the customer gets software updates more frequently. And it means the people who wrote the software -- the ones who know it best -- are the same people running it on a day-to-day basis.

Interestingly, many of these companies don't even like to be called Web-services companies. They've adopted a term called service-oriented architecture (SOA), which they think is a more appropriate way to describe what they do. Whatever they want to call it, it's a Web service.

Q: Are established companies doing this sort of thing?

A: Yes, but the little guys have a head start. Perhaps the best-known of these companies is Salesforce.com (CRM). Founded just five years ago, it snuck up on the big software companies by offering a Web-service version of software for managing customer relationships. Thanks to a successful initial public offering and annual sales starting to approach $200 million, San Francisco-based Salesforce is the best-known of the bunch.

But plenty of others are in the mix, ranging from NetSuite, which like Salesforce was founded by a prot?g? of Oracle CEO Larry Ellison's, to RightNow (RNOW), a Montana company that also had a successful IPO last year. Small companies like Oblix are trying to handle tricky Web-services security issues, and a company called Grand Central even plans to be a sort of big virtual train station, making sure all these Web services connect to each other.

That's not to say the big software companies aren't laboring hard on Web services, too. Siebel Systems (SEBL), which got caught flatfooted by Salesforce, is working overtime on its own software-on-demand strategy. Ellison & Co. have been going at this stuff for years at Oracle. And just about every other big company is following suit.

Q: This sounds a bit like those application service providers (ASPs) that investors took a bath on toward the end of the '90s tech boom. How are these Web-services companies different?

A: Unlike the ASPs, which were building out massive data centers and basically running rental services for other people's software, today's Web-service companies design their software from the ground up to be delivered over the Internet as a service. That's a big difference. It means their business model can scale, and the bigger they get, the more profitable they become because they're building on that initial research and development investment. The ASPs never found a way to make their business models scale or become consistently profitable.

Q: You started with Microsoft. Where does it fit in?

A: You have to begin and end every Web-services conversation with Microsoft. Perhaps more than any other big tech exec, Gates understood both the importance of Web services and how difficult it was going to be to get the technology built. Sure, the vision he painted at that San Francisco conference -- bits of software finding each other over the Internet and automatically talking to each other -- is still a ways off. But as they say, aim high, and then figure out how to get there.

Gates and the rest of the software industry are still working out how to get there, but they've made amazing progress so far.

The following Businessweek Online special report surveys that progress. It looks at the little companies following in Salesforce's tracks, followed by an interview with one of the Microsoft execs charged with fulfilling Gates's vision. It discusses the role of the blogosphere and how that hot tech trend is colliding head-on into the Web-services movement. And it examines a surprising move by the U.S. Securities & Exchange Commission to push a special financial reporting standard based on XML.

Web services...get used to the term. It may be the most important thing in programming since the Web itself was invented. By Jim Kerstetter, Technology editor for BusinessWeek Online